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Thursday, 24 February 1977

Mr SINCLAIR (NEW ENGLAND, NEW SOUTH WALES) (Minister for Primary Industry) - The honourable gentleman has canvassed with me on a number of occasions the very real and acute problems of those who currently provide dairy supplies to the King Island Dairy Products Co-operative Society Limited. Unfortunately, the downturn in skim milk powder returns, in particular, over the last few years has meant that having built up assets over a period of some 70 years, the company is now, I understand, in receivership. For it to return to a solvent position would require the price of skim milk powder to be increased by approximately $300 a tonne. So the prospects for the plant are not bright at present. It is true that the Bureau of Agricultural Economics has undertaken a survey of the area and I expect the results of that survey in about a fortnight s time. As a result of that survey it might be possible to devise ways by which some assistance can be given in determining the future for dairy farmers on the Island. It is really a very tragic situation because quite a large sum of money was spent in trying to upgrade the roller milk process towards spray drying. An application has been made for another sum of approximately $120,000 to complete the reequipment, yet the prospects of the plant seem such that it is hard to justify further expenditure.

I know that the honourable gentleman is concerned with the problems of those on the Island and has a genuine desire to find a way by which their present disastrous circumstances can be corrected. However, it is very hard to justify a further expenditure of money on the upgrading of the plant if the prospects for future economic use of that upgraded plant are negligible. There are currently 42 dairy suppliers to the factory, of whom most have alternative jobs. I think that one of the challenges arising from the report of the Bureau of Agricultural Economics and the State and Federal Government analysis of it is to find alternative ways by which those dairy farmers can continue their way of life on King Island but return a more satisfactory income that the last few years have permitted. I commend the honourable gentleman for his attention to this problem. I assure him of my own and the Government's sympathy towards correcting their plight and that the Government will be examining the BAE report to see what can be done in that general area.

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